Privacy-enhanced OptiSwap

Fair Exchange is a fundamental problem in the exchange of digital items with direct application to electronic commerce. In a fair exchange protocol, two parties want to exchange their corresponding items such that either both receive the other's item, or neither of them receives anything. It has been shown that fair exchange without a trusted third party (TTP) is not possible. Optimistic fair exchange protocols limit the role of TTP to the case that one of the parties misbehaves. OptiSwap (Eckey et al., 2020) is a fair exchange protocol for the exchange of confidential digital items with digital coins. OptiSwap uses a smart contract as the TTP and allows the buyer to use an interactive dispute resolution protocol with the seller (mediated through smart contract) to generate a proof of misbehaviour for a misbehaving seller. We show that OptiSwap's dispute resolution protocol leaks information about the item to the smart contract (public) which can completely reveal the item to the public, and this provides an opportunity for a malicious buyer to pose a credible threat to the fairness guarantee of the system. We propose and design privacy-enhanced OptiSwap that prevents the leakage of information and guarantees security and fairness of the exchange without significantly affecting the efficiency of the protocol. We prove security of the new protocol in an extension of the universal composability for non-monolithic adversaries, and implement and evaluate its efficiency against the original OptiSwap. We discuss our results and suggest directions for future research.